Last week, the BRICS Group — Brazil, Russia, India, China, and South Africa — announced that it is working on creating a new form of currency that it will present at the organization’s upcoming August summit in South Africa.

“The transition to settlements in national currencies is the first step. The next one is to provide the circulation of digital or any other form of a fundamentally new currency in the nearest future. I think that at the BRICS [leaders’ summit], the readiness to realize this project will be announced, such works are underway,” said State Duma Deputy Chairman Alexander Babakov on the sidelines of the Russian-Indian Strategic Partnership for Development and Growth Business Forum.

Mr. Babakoc also stated that a single currency could likely emerge within BRICS, while also being secured by gold, in addition to “other groups of products, rare-earth elements, or soil.”

Formerly known as BRIC, the group, which launched in 2009, was renamed in September 2010 after South Africa was accepted as a full member at the BRIC Foreign Ministers’ meeting in New York.

BRICS has served as an important force in bringing the world’s major emerging economies together, while accounting for more than 40 percent of the global population and around 24% of the global GDP.

Over the past few months, BRICS has been (re)positioning itself as the Global South’s “alternative” to the G7 group of nations, which includes Japan, U.S., U.K., Canada, France, Germany, and the European Union.

South African Foreign Minister Naledi Pandor revealed that global interest in BRICS is “huge,” adding that she had 12 letters from interested countries on her desk, including the UAE, Egypt, Argentina, Mexico, and Nigeria.

News of this potentially new BRICS currency comes in the wake of Washington’s economic policies centered around crypto and the U.S. Dollar, while a growing number of nations from across the world have started to express interest in joining BRICS.

Recently, the ASEAN group of nations discussed dropping the U.S. Dollar, Euro, Yen, and British Pound from financial transactions, and instead, move towards settlements in local currencies. Brazil, which is Latin America’s largest economy, also reached an agreement with China to enable import and export transactions between the two nations without using the U.S. Dollar.

G7 is also expected to start promoting stricter regulations in the crypto sector, according to recent reports.

Challenging the U.S. Dollar

Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym “BRIC,” recently suggested that the bloc of nations should expand and work to counter the dollar’s dominance.

“The US dollar plays a far too dominant role in global finance,” he wrote in a recent paper published in the Global Policy journal on March 26. “Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic.”

The economist has also been extremely critical of BRIC’s decision to admit South Africa as a full member was a poor one, as countries should only be admitted that meet the original criteria of having large populations and sizable economies with significant potential.

“If the main goal of BRICS as a group is symbolism, which it often seems to be, then attracting other, especially large-population emerging countries is understandable,” he said. But if there is an economic purpose “the criterion for including new members needs to be focused,” he wrote in the paper entitled The Future of the BRICS and the New Development Bank.

On Monday, Russian President Vladimir Putin issued an official decree announcing that next year’s 2024 summit of the heads of BRICS states will be held in Kazan.

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